Why do Music CDs Fail to Compete on Price?

Monday, September 18, 2006 | 06:00 PM

Some recent industry stats, courtesy of a music insider:

1. Only 10% of consumers spend more than $100 per year on recorded music. Those consumers account for 40% of all recorded music sales.
2. The "average" consumer purchases 2 CDs per year.  Most people can't remember the name of the last album they bought.
3. Mass merchants (essentially Wal-Mart, Target and Best Buy) account for close to 70% of all recorded music sales. On country titles, Wal-Mart alone can be 40-50% of all sales.

4.  Most CD buyers are either under 12 or over 40.

5. CDs still represent 94% of the domestic business.

Given this data, you can understand 2 key aspects of the industry: One, they are teribly dependent upon sales of polycarbonate discs (i.e., CDs) and two, we continue to see data about how the recording industry has failed to compete economically versus other forms of entertainment.

By economically, I mean on price. So it was nice to find Amazon (or any another retailer) puts older but A list stuff on sale for what I believe is the sweet spot price-wise: Under $10. This week, I will be highlighting different CD's Amazon is offering for sale (at that price).

Let's start with the Who, since that is the most recent show I went to. If you have not completely gone digital, or if you are one of those audiophile types that sound quality matters to, then these are essential Who recordings at reasonable prices, in my own modest priority order.

  • : Quadrophenia

    Quadrophenia (OK, its $14.99, but its a double CD, and you can get it used for under $10)

You can argue amongst yourselves as to whether Who's Next should come before Tommy . . .

Monday, September 18, 2006 | 06:00 PM | Permalink | Comments (27) | TrackBack (0)
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Mr. R,

No offense. Seriously, hear me out. How much did you pay for those 9 Album covers you show on your blog? I hope notihng. Okay, now that we are on the same page... For the music? Okay, a difference. Why? What if you blogged 2kx2k Album cover images? Okay. Let's keep on this track. Sorry, bad pun. Keep this topical.

Content is nearly worthless. Sad but true. Ask why. Not because the content is worthless, iTunes says as much in a market overwhelmed by free. No, content is only overcorrecting in a reversion to mean. Held too high for too long it is inevitable that the correction overshoot.

I don't have an answer but I do know the music business is only reaping what it sowed.

Posted by: Robert Cote | Sep 18, 2006 7:07:57 PM

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